Investment Updates for Stock Investing

Dear friends,

Sharing a story:

At about September 2010 (6 months ago) one of my stock investing student asked me what stock should he invest. My answer to him was oil related stocks listed in US. I had chosen stocks listed in US because most of the ‘hot money’ was flowing into Asian stock markets, resulting in expensive valuation for most good Asian stocks. US stock market had been neglected and so they were pretty cheap at that time.

But the reply from my student was that oil price was low (oil price was at $70+ at that time), why should he be buying oil stock? I find that his question quite amusing but this is the thought of most investors. Most investors think that they should be buying oil stocks when oil price is high OR they should be buying commodity stocks when commodity prices are high.

But the matter of truth is that you should be buying oil stocks when oil price is low AND you should be buying commodity stocks when commodity prices are cheap. That’s when you can make good profits out from your investments.

I had bought Transocean (RIG) listed in US, for myself at that time. Transocean is the world’s biggest oil rig provider. It was only trading at $45.70 at that time. Thanks to middle east problem, this has pushed oil price above $100. And I was able to sell all my Transocean at $81.00 this week.

What happen to that student? At that time he said he was interested to buy Genting (listed in Singapore). Genting was trading near to all time high at that time and it had been falling since start of 2011. I hope he manage to get out in time.

The morale of the story is: Do not follow the crowd. If you follow the crowd, you are likely to perform like the crowd. Most people (the crowd) lose money in stock investments. Because they like to buy when stock market is hot, or when a particular stock is rising.

Our investment strategy is very different. We look for value in stock. If we think that a stock is worth $1, we are interested to buy it when it is trading at 50 cents or below. When a stock is rising, normally we do not find value in those stocks.

Market Outlook:

According to investment funds flow (from my email titled ‘Where are the investment funds flowing into?’), the funds are flowing into US small cap stocks. This is a sign that most stock market are either overvalued or simply out of radar from investors.

This is a sign that we could be at a MAJOR PEAK of a global stock market. I had been using the recent rise in US stock market to sell my STRA (Strayer Education) this week.

Currently I still have Bank of America (BAC) in my portfolio. I had bought Bank of America at $12.33 and it was trading at $14.22 last Friday.

Since I am expecting a stock market correction, my portfolio is sitting on 70% in cash now. When the buying season is back, we will inform our stock subscribers.

Here are my Profit and Loss for the past months:

Oct 10 profit is USD878.11 => SGD1,123.98
Nov 10 profit is SGD2,437.66
Dec 10 profit is zero
Jan 11 profit is USD1,428.39 => SGD1,828.34
Feb 11 profit is USD1,370.48 => SGD1,754.21
Mar 11 profit is USD1,113.88 => SGD1,425.77
Total profit is SGD8,569.96

Market Strategist
Tactical Trading Academy
Website: http://TradingEducationProgram.org/
Email: metal.commodity@tradingeducationprogram.org

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Regards,

BL, CEO of Tactical Trading Academy aka Online Trading Academy
- For Your Profits, Your Success Is Our Success!

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